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Home My WebLink AboutCRA-R-26-0018 MemorandumOMNI Board of Commissioners Meeting April 23, 2026 OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY INTER -OFFICE MEMORANDUM Board Chair Damian Pardo and Members of the CRA Board From: Carlos I. Suarez Executive Director Date: April 16, 2026 File: 19197 Subject: Kush Property, LLC — Subordination Request Enclosures: 19197 Exhibit A 19197 Exhibit B 19197 Exhibit C 19197 Backup BACKGROUND: The Omni Redevelopment District Community Redevelopment Agency ("CRA") is tasked with reducing slum and blight within its boundaries and advancing affordable housing objectives under its 2019 Redevelopment Plan. On July 25, 2024, the CRA adopted Resolution No. CRA- R-24-0046 authorizing funding not to exceed $3,100,000.00 to Kush Property, LLC ("Grantee") for rehabilitation of 2003 North Miami Avenue, Miami, Florida 33127, consisting of ground floor commercial space and residential units. Subsequent project execution revealed unanticipated costs necessary to bring the property into full code compliance, including life safety, structural, and building systems upgrades, creating a funding gap. During execution, it was determined the existing staircase did not comply with current building code and ADA requirements, requiring widening and reducing the unit count from eleven (11) to ten (10). As updated, the project includes ground floor commercial space and ten (10) total residential units: eight (8) to be rented to Moderate -Income eligible residents at or below eighty percent (80%) of AMI for Miami -Dade County, and two (2) units at or below one hundred percent (100%) of AMI, as published annually by HUD. The affordability period shall be a total of fifty (50) years commencing at issuance of the Temporary Certificate of Occupancy or Certificate of Occupancy, whichever is earlier. On February 12, 2026, the CRA adopted Resolution No. CRA-R-0006 increasing the CRA funding allocation to an amount not to exceed $5,100,000.00, extending affordability to fifty (50) years, and updating the unit mix. JUSTIFICATION: On March 19, 2026, the NRD-1 Public Benefits Trust Fund ("Trust") of the Wynwood Business Improvement District adopted Resolution No. 26-004 authorizing a low -interest loan not to exceed $2,800,000.00 to the Grantee to satisfy the senior lender for the project. Authorizing subordination of the CRA's loan (not to exceed $5,100,000.00) to the Trust's additional financing (not to exceed $2,800,000.00) will limit the CRA's financial exposure on the property and ensure project completion, furthering the Plan's affordable housing objectives. RECOMMENDATION: Approve authorization for the Executive Director to negotiate and execute an amendment to the Forgivable Loan Agreement, a Subordination Agreement, and any and all other documents, amendments, and extensions necessary to effectuate the subordination of the CRA's loan to the Trust's loan, in forms acceptable to the General Counsel. Approve the subordination of the CRA's loan to Kush Property, LLC in an amount not to exceed $5,100,000.00 to the Trust's loan in an amount not to exceed $2,800,000.00. FUNDING: No additional CRA funding beyond the previously approved not -to -exceed amount of $5,100,000.00 is requested; action sought is limited to loan subordination and related documentation authority. City of Miami Page 2 of 5 File ID: 19197 (Revision: A) Printed On: 5/15/2026 i Omni CRA City of Miami Legislation OMNI CRA Resolution CRA-R-26-0018 OMNI CRA 1401 N. Miami Avenue Miami, FL 33136 www.miamicra.com File Number: 19197 Final Action Date:4/23/2026 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY ("CRA"), WITH ATTACHMENT(S), AUTHORIZING AND APPROVING THE SUBORDINATION OF THE CRA'S FORGIVABLE LOAN, AS AUTHORIZED PURSUANT TO CRA RESOLUTION NO. CRA-R-24-0046 AND AMENDED PURSUANT TO CRA RESOLUTION NO. CRA-R-26-0006 MADE TO KUSH PROPERTY, LLC, A FLORIDA LIMITED LIABILITY COMPANY, FOR THE MIXED -USE AFFORDABLE HOUSING DEVELOPMENT LOCATED AT 2003 NORTH MIAMI AVENUE, MIAMI FLORIDA, TO ADDITIONAL LENDER NRD-1 PUBLIC BENEFITS TRUST FUND ("TRUST") OF THE WYNWOOD BUSINESS IMPROVEMENT DISTRICT ("BID") IN AN AMOUNT NOT TO EXCEED TWO MILLION EIGHT HUNDRED THOUSAND AND 00/100 DOLLARS ($2,800,000.00); AUTHORIZING THE EXECUTIVE DIRECTOR TO NEGOTIATE AND EXECUTE AN AMENDMENT TO THE FORGIVABLE LOAN AGREEMENT, A SUBORDINATION AGREEMENT, INCLUDING ANY AND ALL OTHER DOCUMENTS, AMENDMENTS, EXTENSIONS NECESSARY TO EFFECTUATE SAID SUBORDINATION, ALL IN FORMS ACCEPTABLE TO THE GENERAL COUNSEL; PROVIDING FOR THE INCORPORATION OF SAID RECITALS AND AN EFFECTIVE DATE. WHEREAS, the Omni Redevelopment District Community Redevelopment Agency ("CRA") is tasked with reducing slum and blight within its boundaries; and WHEREAS, the 2019 Redevelopment Plan ("Plan") on page 4-32 states "to find ways to ensure housing remains affordable for all income levels within the district, but particularly for those households meeting workforce or lower income guidelines," as an objective of the CRA; and WHEREAS, the Plan on page 4-33 states the CRA can "create and implement programs to assist target income households rehabilitate and/or maintain units they currently own" and "devise and implement programs to assist housing providers in creating affordable units for target households"; and WHEREAS, on July 25, 2024, the Board of Commissioners of the CRA as part of its efforts to beautify the CRA area adopted CRA Resolution No. CRA-R-24-0046 (the "Resolution") attached and incorporated herein as Exhibit "A," which authorized the allocation of funds in an amount not to exceed Three Million One Hundred Thousand and 00/100 Dollars ($3,100,000.00) to Kush Property LLC, a Florida Limited Liability Company ("Grantee"), to rehabilitate the property located at 2003 North Miami Avenue, Miami, Florida 33127 ("Property"), located within the CRA boundaries, consisting of ground floor commercial space and residential units; and City of Miami Page 3 of 5 File ID: 19197 (Revision: A) Printed On: 5/15/2026 WHEREAS, subsequent to the adoption of the Resolution, the Grantee experienced unforeseen and unanticipated Project costs required to bring the Property into full code compliance, including but not limited to life safety, structural, and building systems upgrades, thereby creating a funding gap necessitating additional CRA assistance to complete the project as approved; and WHEREAS, during Project execution it was determined that the existing staircase did not comply with current building code and Americans with Disabilities Act ("ADA") requirements, requiring it to be widened, which reduced available floor area and necessitated a reduction in the unit count from eleven (11) to ten (10) units; and WHEREAS, the project now consists of ground floor commercial space and ten (10) total residential units, which after completion eight (8) units will be rented to Moderate -Income eligible residents whose annual income is equal to or less than eighty percent (80%) of the Area Median Income ("AMI") for Miami -Dade County, as published annually by the United Stated Department of Housing and Urban Development ("HUD"), and two (2) units will be for eligible residents whose annual income is equal to or less than one hundred percent (100%) AMI for Miami -Dade County, as published annually by HUD ("Project"); and WHEREAS, Grantee thereby submitted a request to the CRA for additional funding in the amount of Two Million and 00/100 Dollars ($2,000,000.00) to continue the Project; and WHEREAS, the affordability period for the Project shall be extended to a total of fifty (50) years, commencing at the issuance of the Temporary Certificate of Occupancy or Certificate of Occupancy, whichever is earlier; and WHEREAS, on February 12, 2026, the Board of Commissioners of the CRA adopted Resolution No. CRA-R-26-0006, attached and incorporated herein as Exhibit "B," which increased the allocation of funding by an amount not to exceed Two Million and 00/100 Dollars ($2,000,000.00) to an aggregate amount not to exceed Five Million One Hundred Thousand and 00/100 Dollars ($5,100,000.00) to Grantee, extended the period of affordable to fifty (50) years, and updated the unit mix of the Project; and WHEREAS, on March 19, 2026, the Board of the NRD-1 Public Benefits Trust Fund ("Trust") of the Wynwood Business Improvement District ("Bid") adopted Resolution No. 26-004, attached and incorporated herein as Exhibit "C," which authorized a low -interest loan in the amount not to exceed Two Million Eight Thousand and 00/100 Dollars ($2,800,000.00) to Grantee to satisfy the senior lender of the Project; and WHEREAS, the new financing limits the financial exposure of the CRA's loan on the Property and will ensure the completion of the Project; and WHEREAS, the success of the Project will result in accomplishing the stated objectives of the Plan; and WHEREAS, it is in the best interest of the CRA to increase the amount of affordable housing units within the boundaries of the CRA; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF MIAMI, FLORIDA: City of Miami Page 4 of 5 File ID: 19197 (Revision: A) Printed On: 5/15/2026 Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated herein as fully set forth in this Section. Section 2. The subordination of the CRA's loan to Grantee in the amount not to exceed Five Million One Hundred Thousand and 00/100 Dollars ($5,100,000.00), as adopted in accordance with Exhibits "A" and "B", attached and incorporated herein to the additional lender Bid's Trust in an amount not to exceed Two Million Eight Hundred Thousand and 00/100 Dollars ($2,800,000.00), as adopted in accordance with Exhibit "C" attached and incorporated herein, is hereby authorized. Section 3. The Executive Director is hereby authorized to negotiate and execute an amendment to the Forgivable Loan Agreement, Subordination Agreement, and any and all other documents, amendments, extensions necessary to effectuate said subordination, all in forms acceptable to the General Counsel. Section 4. This Resolution shall become effective immediately upon its adoption. APPROVED AS TO FORM AND CORRECTNESS: X. ORG267 WYSON III, LIENERAL COUNSEL City of Miami Page 5 of 5 File ID: 19197 (Revision: A) Printed On: 5/15/2026